Growing Middle Class, Energy Costs Boost Discrete Manufacturing


Jan 13, 2014

ARC Advisory Group

The ongoing sovereign debt situation in Europe caused conflicting developments for discrete manufacturing industries in 2012.

North and Latin American markets saw negative growth due to the controversy. However, a rising middle class and energy costs are anticipated to drive automation and software expenditure growth, according to the "Automation and Software Expenditures for Discrete Industries Global Market Research Study," from ARC Advisory Group.

Manufacturers are pushing for initiatives to reduce energy consumption and associated costs in regions experiencing rapid middle class growth.

"The globalization environment pushes industrial companies to invest in new automation equipment for various industries as companies face challenges to raise productivity, lower product costs, reduce plant operating expenses and increase return on investment (ROI) to compete in the global market," according to Himanshu Shah, senior analyst for ARC Advisory Group and principal author of the study.

An increase in Asia, Eastern Europe and Latin American middle classes are growing demand for products such as electronics, automobiles and white goods. These developing economies remain key players in the expansion of the global automation marketplace.

Investments to improve infrastructure such as roads, water and wastewater facilities, airport facilities and power plants will increase demand for automation equipment. Additionally, global initiatives to reduce energy consumption at the local and national level will also help fuel growth.